Dates in Radio History
On September 25,1928, Paul V. Galvin and his brother Joseph E. Galvin incorporated the Galvin Manufacturing Corporation. We know it today as Motorola (external link)
In 1927 the United States created a temporary five-member Federal Radio Commission (external link), an agency it was hoped would check the chaos and court cases involving radio. It did not and was quickly replaced by the F.C.C. just a few years later. In 1934 the United States Congress created the Federal Communications Commission. In addition to regulating landline telephone business, they also began managing the radio spectrum. The federal government gave the F.C.C. a broad public interest mandate, telling it to grant licenses if it was in the "public interest, convenience, and necessity" to do so. The FCC would now decide who would get what frequencies.
Founded originally as part of Franklin Roosevelt's liberal New Deal Policy, the Commission gradually became a conservative, industry backed agent for the interests of big business. During the 1940s and 1950s the agency became incestuously close to the broadcasting industry in general and in particular to RCA, helping existing A.M. radio broadcasting companies beat off competition from F.M. for decades. The F.C.C. also became a plodding agency over the years, especially when Bell System business was involved.
The American government had a love/hate relation with AT&T. On one hand they knew the Bell System was the best telephone company in the world. On the other hand they could not permit AT&T's power and reach to extend over every part of communications in America. Room had to be left for other companies and competitors. The F.C.C., the Federal Trade Commission, and the United States Justice Department, were all involved in limiting the Bell System's power and yet at the same time permitting them to continue. It was a difficult and awkward dance for everyone involved. And as for cellular, well, the slow action by the FCC would eventually delay cellular by at least a ten years, possibly twenty.
The FCC gave priority to emergency services, government agencies, utility companies, and services it thought helped the most people. Radio users like a taxi service or a tow truck dispatch company required little spectrum to conduct their business. Radio-telephone, by comparison, used large frequency blocks to serve just a few people. A single radio-telephone call, after all, takes up as much spectrum as a radio broadcast station. The FCC designated no private or individual radio-telephone channels until after World War II. Why the FCC did not allocate large frequency blocks in the then available higher frequency spectrum is still debated. Although commercial radios in quantity were not yet made for those frequencies, it is likely that equipment would have been produced had the F.C.C. freed up the spectrum.


Mobile radio?! A marine radio telephone of 1937 recently up for bid on e-bay.com The seller thought it was a Harvey Wells, Model MR-10. This beast measures 20"X 11"X 8 1/2" and weighs close to 40 pounds. This was probably compact for its time. The tube based radio also needed a big and heavy power supply. The present day SEA digital radiotelephone, by comparison, is a far superior machine and weighs in at 9.1 pounds, and measures only 4" by 10.5" It draws just 13 volts. As is clearly evident, much progress in radio had to await microprocessors and miniaturization.
IMTS authority Geoff Fors checked in recently:
"Tom. Get this -- I just looked at some of your material on your website on early mobile phone history, and saw you have a photo of my Harvey Wells 1941 marine radio telephone! I bought that unit on eBay, I don't recall if anyone else even bid on it, it was very cheap. The seller just threw it in a box with some wadded newspapers, and when it arrived the microphone was smashed to bits along with the porcelain insulators and everything protruding from the rear panel, the cabinet was caved in on top, and there was a baggie with the smashed up knobs in it lying INSIDE the cabinet. I don't know how the knobs were shown in the photo on eBay but then wound up inside the cabinet for shipping. They were shot anyway. It does actually work, although the cabinet was painted a horrible yellow color and should have been wrinkle burgundy. I have already straightened, stripped and primed the cabinet and have a replacement mike lined up from a friend. There is some consternation whether the set is pre or post-war. It uses metal octal tubes, which suggests postwar use, although those tubes were available before 1946. It is definitely pre-1950, in any case."
(Editor's note: I don't mean to confuse you, but these are both principally short wave radios, able to place a phone call through an operator, but they aren't units dedicated to telephony. "Phone" is an old radio term for voice transmission, it doesn't mean, necessarily, that you have a radio-telephone. Photographs simply illustrate radio size.)
Early conventional radio-telephone development and progress towards miniaturization
Radio-telephone work was ongoing throughout the world before the war. This excellent photograph shows a Dutch Post Telegraph and Telephone mobile radio. As the excellent Mobile Radio in the Netherlands web site explains it:
"The NSF Type DR38a transmitter receiver was the first practical mobile radio telephone in Holland. The set was developed in 1937 from PTT specifications and saw use from 1939 onwards. It operates in the frequency range between 66-75 MHz having a RF power output of approximately 4-5 Watts. Change-over from receive to transmit is effected by the large lever on the front panel. The transmitter is pre-set on a single frequency while the receiver is tuneable over the frequency range." I do not know if this set actually connected to their public switched telephone network. It may have been called a radio-telephone, just like the marine radio-telephone described above.
More good details are here. Their page does take a long time to load:
http://home.hccnet.nl/l.meulstee/mobilophone/mobilophone.html

DuringWorld War II civilian commercial mobile telephony work ceased but intensive radio research and development went on for military use. While RADAR was perhaps the most publicized achievement, other landmarks were reached as well. "The first portable FM two-way radio, the "walkie-talkie" backpack radio," [was] designed by Motorola's Dan Noble. It and the "Handie-Talkie" handheld radio become vital to battlefield communications throughout Europe and the South Pacific during World War II." [Motorola (external link) For those researching this time period, see my comments for reading below.
In the July 28, 1945 Saturday Evening Post magazine, the commissioner of the F.C.C., E.K. Jett, hinted at a cellular radio scheme, without calling it by that name. (These systems would first be described as "a small zone system" and then cellular.) Jett had obviously been briefed by telephone people, possibly Bell Labs scientists, to discuss how American civilian radio might proceed after the war.
What he describes below is frequency reuse, the defining principle of cellular. In this context frequency reuse is not enabled by a well developed radio system, but simply by the high frequency band selected. Higher frequency signals travel shorter distances than lower frequencies, consequently you can use them closer together. And if you use F.M. you have even less to worry about, since F.M. has a capture effect, whereby the nearest signal blocks a weaker, more distant station. That compares to A.M. which lets undesired signals drift in and out, requiring stations be located much further apart:
"In the 460,000-kilocycle band, sky waves do not have to be taken into account, day or night. The only ones that matter are those parallel to the ground. These follow a line of sight path and their range can be measured roughly by the range of vision. The higher the antenna, the greater the distance covered. A signal from a mountain top or from an airplane might span 100 miles, by one from a walkie talkie on low ground normally would not go beyond five miles, and one from a higher powered fixed transmitter in a home would not spread more than ten to fifteen miles. There are other factors, such as high buildings and hilly terrain which serve as obstacles and reduce the range considerably."
"Thanks to this extremely limited reach, the same wave lengths may be employed simultaneously in thousands of zones in this country. Citizens in two towns only fifteen miles apart -- or even less if the terrain is especially flat -- will be able to send messages on the same lanes at the same time without getting in one another's way."
"In each zone, the Citizen' Radio frequencies will provide from 70 to 100 different channels, half of which may be used simultaneously in the same area without any overlapping. And each channel in every one of the thousands of sectors will on average assure adequate facilities for ten or twenty, or even more "subscribers," because most of these will be talking on the ether only a very small part of the time. In each locality, radiocasters will avoid interference with one another by listening, before going on the air, to find out whether the lane is free. Thus the 460,000 to 470,000 kilocycle band is expected to furnish enough room for millions of users. . . "
The article was deceptively titled "Phone Me by Air"; no radio-telephone use was envisioned, simply point to point communications in what was to become the Citizens' Radio Band, eventually put at the much lower 27Mhz. Still, the controlling idea of cellular was now being discussed, even if technology and the F.C.C. would not yet permit radio-telephones to use it.
In 1946, the very first circuit boards, a product of war technology, became commercially available. Check out the small board in the lower right hand corner. It would take many years before such boards became common. The National Museum of American History (external link) explains this photo of a 'midget radio set' like this: "Silver lines replace copper wires in the 'printed' method developed for radio circuits . . . One of the new tiny circuits utilizing midget tubes is shown beside the same circuit as produced by conventional methods." These tiny tubes were called "acorn tubes" and were generally used in lower powered equipment. Car mounted mobile telephones used much larger tubes and circuits.

-----------------------------
Resources
My comments for reading: The following three volumes chronicle American military radio development during World War II, focusing on the United States Army. They are indispensable for anyone researching radio, especially those looking at the beginning of F.M. for handheld and mobile operations. Part of a larger series, the United States' official chronicle of World War II, these should be available through any major university. Out of print, used copies exist, figure $25 to $30 a volume; I paid $80 for my set. They have been reprinted a number of times, any edition is serviceable. For used books try ABE below.
Terrett, Dulany. The Signal Corps: The Emergency (to December 1941). Washington, Office of the Chief of Military History, Dept. of the Army, 1956. xiii, 383 p. illus., ports. 26 cm. Series title: United States Army in World War II. Technical services
Thompson, George Raynor. The Signal Corps: The Test (December 1941 to July 1943), by George Raynor Thompson [and others] Washington, Office of the Chief of Military History, Dept. of the Army, 1957. xv, 621 p. illus. 26 cm. Series title: United States Army in World War II : The technical services
Thompson, George Raynor. The Signal Corps: The Outcome (mid-1943 through 1945), by George Raynor Thompson and Dixie R. Harris. Washington, Office of the Chief of Military History, U.S. Army;1966. xvi, 720 p. illus., maps, ports. 26 cm. Series title: United States Army in World War II. Technical services